Daily Game Plan

by Contributor
on November 12, 2024

TODAY’S GAME PLAN:  from the trading
desk, this is not research

TODAY’S ECONOMIC DATA:  10:00ET Fed’s Waller speaks; 10:15ET Fed’s Barkin speaks; 11:00ET NY Fed 1-Yr Inflation
Expectations; 2:00ET Fed’s Kashkari speaks; 5:00ET Fed’s Harker speaks; 5:30ET Fed’s Barkin speaks

Highlights and News:  

  • OPEC Cuts Global Oil Demand Growth Forecasts for a Fourth Month
  • Marco Rubio is expected to be named secretary of state
  • Donald Trump Jr. will join VC firm 1789 Capital rather than his father’s administration
  • The US plans to triple nuclear capacity by 2050

 

World stocks declined amid signs the rally had left valuations overextended and as investors awaited news on President-elect Donald Trump’s cabinet appointees. Emerging-market
stocks dropped the most in five weeks and their currencies depreciated against a resurgent dollar.  Meanwhile, China announced today that it is planning to cut taxes for home purchases as the government dials up fiscal support to revive a lifeless housing
market. Protectionist policies from the incoming US administration will hamper global growth and Europe must be better prepared than in 2018, European Central Bank policymakers warned today. German Chancellor Olaf Scholz agreed to submit to a confidence vote
on December 16, which will pave the way for an early election on February 23rd.

 

EQUITIES:  

US equity futures inch lower after five days of gains for the S&P 500. Investor exposure to US stocks jumped to the highest since 2013 after the presidential election, on optimism around
stronger economic growth, according to a survey from Bank of America. Renewable energy stocks have become the big losers of the US election over the past week, given Trump’s criticism of green initiatives. Meanwhile, US inflation data due Wednesday could determine
whether the Fed cuts interest rates again next month.  

Futures ahead of the bell: E-Mini S&P -0.1%, Nasdaq -0.1%, Russell 2000 -0.5%, DJI -0.1%. 

In pre-market trading, Grab Holdings (GRAB) jumps 8% after the ride-hailing and delivery company boosted its earnings and revenue forecasts for the year. Live Nation (LYV) climbs 5% after
the entertainment posted 3Q profit that impressed. Luminar (LAZR) gains 2% after the auto technology company entered pacts with Volvo and a Japanese automaker. Neurogene (NGNE) sinks 33% after the drug developer said it became aware of an emerging serious
side effect related to its experimental treatment for Rett syndrome. Shopify (SHOP) soars 13% after reporting 3Q sales that beat analysts’ estimates. Home Depot’s (HD) shares rose 2% after it lifted its forecast for the year. Tesla (TSLA) is lower by 2.5%
after rallying as much as 50% from the November 4 low.

European gauges followed their Asian counterparts lower with on policy concerns from US president-elect Donald Trump. The Stoxx 600 index fell more than 1% with basic
resources, chemicals and consumer products leading declines. All sub-indexes are in the red except technology. Investor confidence in Germany’s economy unexpectedly worsened in November with the ZEW investor expectation index falling to 7.4 from 13.1 the previous
month. Among individual company moves, Bayer AG plunged 14% to a two-decade low after cutting profit guidance. Temenos AG rallied over 6% as investors welcomed its new strategy. AstraZeneca Plc gave up early gains as analysts await this afternoon’s conference
call after the drugmaker reported better-than-expected sales and earnings.  Stoxx 600 -1.1%, DAX -1.1%, CAC -1.4%, FTSE 100 -1%.  Basic Resources -2.5%, Chemicals -1.7%, Household Goods -1.7%, Telecom -1.6%. Technology +0.4%.

Shares in Asia fell on the back of steep declines in semiconductor stocks amid rising geopolitical uncertainties. The MSCI Asia Pacific Index dropped 1.3%, with chipmakers
TSMC and Samsung among the biggest drags.  Chinese internet firms Tencent and Alibaba also slumped ahead of their earnings reports later this week.  Japanese equities wiped out early strength while Taiwanese and South Korean stocks suffer tech-related losses.
The possibility of prominent China hawks joining the Trump administration sent Hong Kong’s Hang Seng Index as much as 3.3% lower. Mainland indexes fared a little better amid a report that China plans to cut homebuying taxes. Hang Seng Tech -4.2%, Hang Seng
Index -2.8%, Taiwan -2.3%, Kospi -1.9%, Philippines -1.9%, CSI 300 -1.1%, Sensex -1%, Thailand -0.8%, Singapore -0.75%, Vietnam -0.4%, Nikkei 225 -0.4%, ASX 200 -0.1%, Topix +0.07%, Indonesia +0.75%.

FIXED INCOME: 
 

Treasuries are 5bp-8bp cheaper across the curve led by intermediate sectors as US trading resumes after Monday’s bank holiday. US 10-year yields climb 6 bps to 4.37%
while two-year borrowing costs are at the highest since July.  2s10s curve is little changed after unwinding a flattening move. Amount of Fed easing priced into swaps through end of next year continues to ebb as markets digest the implications of Donald Trump’s
presidential victory. Several Fed speakers are slated and IG issuance slate is expected to be heavy. 

 

 

METALS: 

Gold slips as traders unwind pre-US election positions. One unexpected loser so far in the Trump trade has been gold and precious metals miners, with spot gold falling
to its lowest level in a month.  The VanEck Gold Miners ETF has fallen 8.4% since Nov. 5, when Donald Trump was elected US president. That’s nearly twice the decline of the underlying commodity, which is down 4.4% over the same period. Spot gold -0.4%, Silver
-0.4%, Copper -1.3%.

 

 

ENERGY:   

 

Oil edges higher as it struggled to gain a foothold, having dropped in recent days as traders weigh up the impact of China’s stimulus plan against oversupply concerns.
OPEC cut its global oil demand growth forecasts for a fourth month while recognizing a slowdown in China. Consumption will increase by 1.8 million barrels a day — down 107,000 b/d from the group’s previous guidance. Still, the outlook is about double the rate
anticipated by the IEA. WTI +0.7%, Brent +0.7%, US Nat Gas -0.5%, RBOB +0.7%.

 

 

 

CURRENCIES: 

In currency markets, the dollar rose to a four-month peak as traders continued to pile into trades seen as benefiting from the incoming Trump administration. The
euro and Chinese yuan have come under intense pressure since the US election as traders assess the risk of a steep rise in tariffs, as well as the risk of the Chinese economy continuing to struggle even with Beijing’s raft of multi-trillion dollar stimulus
measures. The euro is feeling additional pressure from political uncertainty in Germany. Sterling fell after data showed regular UK wage growth slowed and unemployment rose.  US$ Index +0.25%, GBPUSD -0.4%, EURUSD -0.35%, USDJPY +0.3%, AUDUSD -0.35%, NZDUSD
-0.25%, USDCHF is flat.

 

 

 

Spot Bitcoin %, Spot Ethereum %. Bitcoin’s rally stalled short of $90,000, having gained 30% in the week since the election. Stocks related to digital currency have
performed even better, with Coinbase Global rocketing 67% since the election and Galaxy Digital Holdings up 65% on the Trump administration’s expected crypto-friendly policy proposals.

 

 

 

Colors within the report:
Green is always the 200 period (day, week).
Red is always 21,
Blue = 50,
Brown =
100 *Stars have added importance 

  • Upgrades
    • Argenx (ARGX BB) ADRs Raised to Outperform at Wolfe; PT $697
    • Avidbank (AVBH) Raised to Buy at Janney Montgomery; PT $26
    • Bristol Myers (BMY) Raised to Outperform at Leerink; PT $73
    • C.H. Robinson (CHRW) Raised to Buy at Citi; PT $125
    • Canadian Apartment (CAR-U CN) Raised to Buy at Veritas Investment Research Co
    • Canadian National (CNR CN) Raised to Buy at Citi; PT C$181.54
    • Carter’s (CRI) Raised to Neutral at Citi; PT $50
    • First Quantum Minerals (FM CN) Raised to Overweight at Barclays; PT C$25
    • International Flavors (IFF) Raised to Overweight at Morgan Stanley
    • SentinelOne (S) Raised to Buy at Deutsche Bank; PT $32
    • Softchoice (SFTC CN) Raised to Sector Outperform at Scotiabank; PT C$24
    • South Atlantic Bancshares (SABK) Raised to Buy at Janney Montgomery
    • Twilio (TWLO) Raised to Overweight at Wells Fargo; PT $120
    • Viking Holdings (VIK) Raised to Overweight at Morgan Stanley; PT $49
  • Downgrades
    • AeroVironment Inc (AVAV) Cut to Hold at Jefferies; PT $240
    • Airbnb (ABNB) Cut to Reduce at Phillip Secs; PT $120
    • Alnylam (ALNY) Cut to Underperform at Wolfe; PT $205
    • Arcadium Lithium (ALTM) Cut to Neutral at B Riley; PT $5.85
    • Asbury Auto (ABG) Cut to Neutral at Seaport Global Securities
    • Atlas Energy Solutions (AESI) Cut to Equal-Weight at Barclays; PT $19
    • Baxter (BAX) Cut to Sell at CFRA
    • Brookfield Business (BBU-U CN) Cut to Reduce at Veritas Investment Research Co
    • First Mid Bancshares Inc (FMBH) Cut to Neutral at DA Davidson; PT $47
    • Five9 (FIVN) Cut to Equal-Weight at Wells Fargo; PT $40
    • GSK (GSK LN) ADRs Cut to Hold at Jefferies; PT $39.50
    • Horace Mann (HMN) Cut to Market Perform at KBW; PT $44
    • Hudson Pacific (HPP) Cut to Hold at Jefferies; PT $5
    • Knight-Swift (KNX) Cut to Sell at Citi; PT $56
    • Okta (OKTA) Cut to Hold at Deutsche Bank; PT $85
    • Phunware (PHUN) Cut to Neutral at HC Wainwright; PT $6
    • RAPT Therapeutics (RAPT) Cut to Neutral at Piper Sandler; PT $2
    • Ross Stores (ROST) Cut to Neutral at Citi; PT $152
    • RXO (RXO) Cut to Neutral at Citi; PT $33
    • Schneider National (SNDR) Cut to Sell at Citi; PT $30
    • Sprinklr (CXM) Cut to Underweight at Wells Fargo; PT $6
    • TriCo Bancshares (TCBK) Cut to Neutral at DA Davidson; PT $53
  • Initiations
    • Allegro MicroSystems (ALGM) Rated New Buy at Loop Capital; PT $30
    • Altimmune (ALT) Rated New Buy at UBS; PT $26
    • Cadence Design (CDNS) Rated New Buy at Loop Capital; PT $360
    • CRH (CRH) Reinstated Buy at HSBC; PT $116
    • Marvell Technology (MRVL) Rated New Hold at Loop Capital; PT $95
    • Monolithic Power (MPWR) Rated New Hold at Loop Capital; PT $660
    • Nvidia (NVDA) Rated New Buy at Redburn; PT $178
    • NXP Semi (NXPI) Rated New Buy at Loop Capital; PT $300
    • ON Semi (ON) Rated New Buy at Loop Capital; PT $95
    • Qorvo (QRVO) Rated New Hold at Loop Capital; PT $73
    • Qualcomm (QCOM) Rated New Hold at Loop Capital; PT $180
    • Rambus (RMBS) Rated New Buy at Loop Capital; PT $70
    • Sagimet Biosciences (SGMT) Rated New Buy at UBS; PT $12
    • Skyworks (SWKS) Rated New Hold at Loop Capital; PT $90
    • Synopsys (SNPS) Rated New Buy at Loop Capital; PT $675
    • Veon (VEON) ADRs Rated New Buy at Benchmark; PT $48

 

 

 

 

 

 

Data sources: Bloomberg, Reuters, CQG

 

 

David Wienke

Categories:

Charts

Tags:

aucldxesngqqqsp500tyusdvixwtiX

Comments are closed